The Telecom New Zealand Ltd [TEL.NZX] half year 2011 result out today of NZ$164 million net profit after tax is 32.2% lower than the result for the same period last year. This comes on gross revenue of $2,583 billion, down 3.3% on last year.
This comes in a year of turmoil for the company where its share price plunged and regulatory issues continued to hamper growth and future planning.
Telecom CEO, Paul Reynolds said , ‘Telecom’s delivery of the turnarounremains on track, with EBITDA growth in the second quarter. The quarter saw progress on a range of fronts, including the addition of 60,000 customers in mobile, Telecom Retail attracting 64% of broadband connection growth, reduced fixed line churn and the success of our cost out programme".
I see more of the same for full year 2011. With a stagnant to dropping revenue base the only way profit can grow slightly or stay at current levels is to cut operational costs further. Telecom have tried to do this over the last half but with mixed success as clearly the bottomline shows this.
Shareholders might like to look for more positive news from the company for the medium term 2012-2014 as their foray into the Government fast broadband initiative rolls out and could well mean an end to falling sales.
Until then expect the status quo
Net profit: 166,000; Down 32.2%; 243,000
Total operating revenue and other gains
(before adjusting items):
2,583,000; Down 3.3%; 2,671,000
Earnings per share: 9 cps; 13 cps
Second Quarter Dividend: 3.5 cps
Increased competition impacting on margins
Transcript from Investor Briefing
Telecom NZ @ Share Investor
Telecom New Zealand 2011 first quarter profit review
Telecom Chart: Lazarus Recovery on lower volume
Telecom maybe oversold
Telecom NZ Share Price has "Jumped the Shark"
I was Wrong... sort of
Telecom NZ: TV3 60 Minutes Segment more like Corporate PR
Telecom Share Price Limbos but has it jumped the Shark?
Telecom NZ: Saint Gattung gets her Ya Ya's out
Telecom NZ: Bye Bye Paul Reynolds
Long Term View: Telecom NZ Ltd
Stock of the Week: Telecom Ltd
Getting cute and fluffy with Teresa Gattung
Telecom NZ Hangs up
Business Gobbledygook puts up barriers to communication
A Rare Breed
Telecom NZ facing a watershed period
Biology a major key in "glass ceiling" for women
Telecom rewards Gattung for mediocrity
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c Share Investor 2011